MGM Mirage Posts $750.4 Million Third-Quarter Loss on Writedown

By Beth Jinks

Nov. 5 (Bloomberg) -- MGM Mirage, the biggest casino owner on the Las Vegas Strip, reported a $750.4 million third-quarter loss after writing down its CityCenter investment. Excluding the charges, the company beat analysts’ estimates.

The break-even per share before the charges and other items compared with the average 8-cent loss projected by 20 analysts in a Bloomberg survey. Revenue dropped 14 percent to $1.53 billion from $1.79 billion, the Las Vegas-based company said today in a statement. That exceeded the $1.47 billion average estimate.

Chief Executive Officer Jim Murren is counting on CityCenter, an $8.5 billion development on the Las Vegas Strip, to increase business travel and tourism once it opens in December. Visits to Las Vegas slid 5.8 percent this year through August, after dropping 4.4 percent last year, according to the Las Vegas Convention & Visitors Authority.

“We continue to show sequential improvement in our operating results” and increased Las Vegas market share, Murren said today in the statement. “We expect CityCenter to grow our business significantly.”

The third-quarter net loss of $1.70 a share compares with a profit of $61.3 million, or 22 cents, a year earlier. MGM Mirage announced the CityCenter charges last month.

Cash flow, or property earnings before interest, taxes, depreciation and amortization, fell 12 percent to $415 million excluding some items.

CityCenter Investment

The owner of the MGM Grand, Mirage and Bellagio casinos booked $1.17 billion in non-cash charges mostly related to the value of its CityCenter investment, a casino, hotel, apartment and mall development with partner Dubai World. Last month, condominium buyers at the development were offered a 30 percent price cut to close their purchases.

MGM Mirage fell 33 cents, or 3.4 percent, to $9.32 yesterday in New York Stock Exchange composite trading. The shares had dropped 32 percent this year before today.

MGM Mirage’s biggest shareholder, Kirk Kerkorian, said last month he’s seeking a partner for his 37 percent stake and signaled he’s open to other deals, saying the shares are undervalued. Any transaction would happen after CityCenter opens, he said.

To contact the reporter on this story: Beth Jinks in Las Vegas at bjinks1@bloomberg.net